A taxi driver has had a $2500 late reporting excess removed from his crash claim after the industry ombudsman ruled the “discretionary” charge should not apply.

The driver was at fault in a December 2023 crash with another vehicle that caused only minor damage to his car.  

The following May, the insurer of the other driver issued a demand for the cost of repairs to its client’s vehicle.

The taxi driver then lodged a claim with Taxi Care Club, a professional driver mutual fund.  

The fund accepted the claim but applied a $1500 universal excess and a $5000 late reporting excess, later revised to $2500.  

It said the late reporting excess was imposed because the claim was lodged more than 90 days after the incident.

But the Australian Financial Complaints Authority says policy terms regarding the excess were “not absolute” and it would apply only if the fund could show it was prejudiced by the delayed claim.  

Taxi Care Club argued the late submission prevented it from carrying out pre- and post-repair inspections of the other vehicle. It also noted the complainant’s decision to continue driving his taxi after the crash could have resulted in more damage to his car.

AFCA says there is no evidence the third party’s repair costs were excessive or would have been reduced had the mutual fund performed inspections.  

It adds there were “no negative ramifications” from the driver’s decision to continue driving his taxi in its state of “minimal” damage.

AFCA’s ombudsman says the excess “must be exercised fairly in a manner which fund members would expect. I do not accept fund members would expect that a higher excess is applied in circumstances where a delay in lodgement has had no bearing whatsoever on the claim.”  

See the ruling here.

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